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Chapter 1

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Department
Marketing
Course
MKT 100
Professor
Marla Spergel
Semester
Winter

Description
Chapter 1: Overview of Marketing What is Marketing? • Marketing is a set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships • Firms develop a marketing plan that specifies the marketing activities for a specific period of time. • The marketing plan is broken down into various components – how the product or service will be conceived or designed, how much it should cost, where and how it will be promoted and how it will get to the consumer Marketing is About Satisfying Customer Needs and Wants • A need is when a person feels deprived of the basic necessities of life, such as food, clothing, shelter, or safety • A want is the particular way in which the person chooses to fulfill his or her need, which is shaped by a person’s knowledge, culture, and personality • To understand customer needs and wants, the company must first identify the customers or market for its product or service • The market for a firm’s offerings consists of all consumers who need or want a company’s products or services and have the ability and willingness to buy them • Marketers divide the market into subgroups or segments of people to whom they are interested in marketing their products, services, or ideas o For example, crest could divide the market into adolescent, adult, and senior users, or perhaps into wine and coffee drinkers, etc. • The target market is the customer segment or group to whom the firm is interested in selling its products and services Marketing Entails Value Exchange • Marketing is about an exchange – the trade of things of value between the buyer and the seller so the each is better off as a result o For example: when you purchase a new One Direction album, you are engaging in a marketing exchange. You get the songs, and the exchange partners get money and information about you. Marketing Requires Product, Price, Place, and Promotion Decisions • Marketing has been divided into a set of four interrelated decisions known as the marketing mix, or four P’s: product, price, place, and promotion • The four P’s comprise the marketing mix, which is the controllable set of activities that the firm uses to respond to the wants of its target markets • Product: Creating Value o Create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs. For example, water. o Goods are items that you can physically touch – Roots clothing, Molson Canadian beer, Kraft Dinner, etc. o Services are intangible customer benefits that are produced by people or machines and cannot be separated from the producer – air travel, banking, insurance, beauty treatments, and entertainment are all services o Many offerings represent a combination of goods and services – for example, at a One Direction concert; you can enjoy the concert (service) and buy their CD (good). o Ideas include thoughts, opinions, philosophies, and intellectual concepts that can be marketed – for example, groups promoting bicycle safety go to schools, give talks, and sponsor bike helmet poster contests for the members of their primary target market: children. • Price: Transacting Value o Price is everything the buyer gives up – money, time, energy – in exchange for the product o For marketers, the key to determining prices is figuring out how much customers are willing to pay so that they are satisfied with the purchase and the seller achieves a reasonable profit • Place: Delivering Value o Place describes all the activities necessary to get the product from the manufacturer or producer to the right customer when the customer wants it o Place decisions are concerned with developing an efficient system for merchandise to be distributed in the right quantities, to the right locations, and at the right time in the most efficient way in order to minimize system wide costs while satisfying the service levels required by their customers • Promotion: Communicating Value o Promotion is communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response o Promotion generally can enhance a product or service’s value Marketing Is Shaped by Forces and Players within the Firm • A company’s marketing activities are shaped by factors that are both internal to the firm and external to the firm • For marketers to deliver the best value to their customers, they must leverage the full potential of their internal capabilities; work effectively with their partners (i.e., suppliers, distributors, financial institutions, advertising agencies and research firms); and constantly evaluate and respond to the competitive environment Marketing Is Shaped by Forces and Players External to the Firm • External forces such as cultural, demographic, social, technological, economic, and political and legal changes shape a company’s marketing activities o For example, marketers are beginning to use more environmentally friendly packaging for their products; some companies are even using alternative materials in the products themselves Marketing Can Be Performed by Both Individuals and Organizations • The process in which businesses sell to consumers is known as B2C (business-to- consumer) marketing, whereas the process of selling merchandise or services from one business to another is called B2B (business-to-business) marketing • Ebay and Kijiji consumers have started marketing their products and services to other consumers which consumers sell to other consumers, or C2C (consumer-to- consumer) • Social media is quickly becoming an integral part of their marketing and communications strategies • Social media: the use of the internet tools to easily and quickly share content to foster dialogue, social relationships, and personal identities Marketing Occurs in Many Settings • Marketing can also jump-start the economies of less developed countries by actually putting buyers and sellers together to create new markets • Customers become exposed to an arra
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